IMVT - Lack of significant clinical catalysts leads UBS to downgrade Immunovant to neutral

Shares of small-cap clinical-stage biotech Immunovant ( NASDAQ: IMVT ) fell as much as 12.7% to $4.26 in Monday morning trading, after UBS research downgraded its rating on the company to neutral from buy, citing a lack of major clinical analysts until H2 of next year.

IMVT's lead investigational product is IMVT-1401 (batoclimab), a monoclonal antibody which inhibits a protein called neonatal Fc receptor (FcRn) for the treatment of autoimmune diseases mediated by a type of antibody called immunoglobulin G (IgG).

Aside from the lack of significant clinical catalysts, UBS analysts Colin Bristow, Yihan Li and Elliott Bosco also cited increasing FcRn competition and lipid elevation issues that haled batoclimab's development as reasons for downgrading IMVT stock.

The analysts also trimmed their price target on IMVT to $5 from $7, which represents a 2.5% upside to the stock last closing price of $4.88.

"We acknowledge IMVT is trading ~$1-2 above cash but ultimately this cash reserve is committed to fund batoclimab development," the analysts wrote in a research note.

"With this in mind, we expect IMVT to trade broadly in line with the biotech market until we get closer to the next clinical update, with the time-based risk of further lipid issues or a new safety signal," they added.

UBS' neutral rating on IMVT contrasts to a Wall Street average rating and Seeking Alpha Quant rating of buy.

IMVT stock was last trading 5.7% lower at $4.60 as of 1111 ET.

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